Weekly STI Chart Update(13th - 17th Feb 2012)

STI manage to continue to break higher this week however many stocks has failed to continue the buoyant move in the previous week.

This is a sign of the rally running out a bit of steam. With RSI over 70 and based on previous observations,a end of the week of RSI over 70 has always preceded some form of correction within the next 2 week.

This indicates that we should be more cautious of opening long position this week but if there are steep decline,i still think you could consider entering a small amount because we will never know where the low is until on hindsight.

It is still difficult to read the market at this time hence try not to use leverage and only nibble the amount you can afford to hold. Do not over-extend yourself,only when things are clearer then you should consider leveraging to maximize your returns.

I will be screening for some of the stocks to look out for to send tomorrow morning in this upcoming week for my clients and should update those possible candidates in my blog over the next week.

Weekly Technical STI Update

Weekly Analysis for 6th Feb - 10th Feb 2012



STI is still hovering around a previous resistance but the performance of non-index stocks this week has been excellent with many chalking up huge amount of gains and i notice that there are now more stocks breaking out of recent high or into new high.

All this suggests that the stock market is now in a very strong position. Even if stocks prices decline,it is likely that once any retracement when over should see prices rebound and break higher.

Although market looks overbought and prices could start dipping any time. You should consider entering small on any intraday decline or any sharp decline due to negative news and look to add bigger only when market is oversold. During this week, many stocks has failed to fall despite widespread media talking about a correction. The resilient may indicate that we could head even higher in the near term before we corrects down.